TR Module (Trade Repository)

The objectives of the Regulation (EU) no. 648/2012 (EMIR) are to increase market transparency and to monitor concentrations of systemic risks in the derivatives market. The regulation requires all financial institutions and non-financial institutions of the EU to report traded derivatives to a trade repository (TR). An equivalent legislation is planned with the financial market infrastructure act (FinfraG) in Switzerland and is slated to commence in 2016. Within the ABACUS/Transactions product, the TR module generates the reports to the respective trade repository.

Regulatory Requirements

EMIR

EMIR is the foundation for transaction-based reporting requirements in Europe. It was adopted by the European Parliament on March 29, 2012 and entered into force on August 16, 2012. According to EMIR, financial and non-financial counterparties (FC/NFC) and central counterparties (CCPs) shall ensure that every settlement, every change and termination of derivatives contracts,  regardless of whether they are over-the-counter or exchange traded, shall be reported to a trade repository by the end of the following business day. The reporting scope has been defined by the European Securities and Markets Authority (ESMA), however the range of the scope may vary, depending on how the reporting obligations have been deemed by the selected trade repository.

FMIA/FinfraG

The Swiss government has developed FMIA/FinfraG against the background of international efforts to regulate the derivatives markets by consolidating various Swiss legislations in the area of financial market regulation. This regulation is highly dependent on the EMIR regulation and results in a variety of obligations for Swiss market participants, such as:

Our Solution

Currently, the TR module supports the generation of reports for the REGIS-TR and DTCC trade repositories. This applies to both individual institutions as well as institutional groups. The generation of reports in accordance with FMIA/FinfraG for the Swiss trade repository SIX is now in development to allow for a proper report which is expected to start in Q1/Q2 2016.

Benefits for the Clients

Alongside the correct creation of the required regulatory reports, the TR module supports additional functionalities, such as consistency and relevance checks, internal portfolio reconciliation, data validation according to the rules of the trade repositories, audit trail for manual corrections (e.g. in case of consistency errors), table export functionality (.xls and .csv) as well as analytical reporting. The internal portfolio reconciliation functionality (see figure 2), the generation of proposed transactions and the identification of irrelevant reporting transactions are additional functionalities which help to considerably simplify the daily reporting obilgations. The trade repositories generate feedback for each transaction which is then imported via the module TR. Thus, all relevant data for EMIR can be stored, managed and analysed to facilitate a transparent, comprehensive report submission and to support standardized and coordinated data warehousing between the systems.

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